Jerome Powell, President of the American Federal Reserve, during an Economic Chicago Club event in Chicago, Illinois, United States, Wednesday, April 16, 2025.
Jamie Kelter Davis | Bloomberg | Getty images
President Donald Trump increased his pressure campaign on the president of the federal reserve Jerome Powell on Monday, calling him “major loser” and warning that the American economy could slow down unless the interest rates are immediately reduced.
“Pre -empty declines” in interest rates are requested by many, “wrote Trump on Social truth.
Trump said there was currently “practically no inflation” in the United States, and that energy costs and “most” things “are declining.
“With these trendy costs so well downwards, just what I had predicted that they would make, there can hardly be inflation, but there can be a slowdown in the economy unless Mr. Too late, a large loser, does not decrease interest rates, now,” wrote Trump.
Trump’s last salvo against Powell – whom he appointed during his first administration – came as president and his team studies if they can legally dismiss the head of the central bank before the expiration of his mandate in May 2026.
Powell has constantly said that the president could not withdraw it under the law.
Any Trump attempt to dismiss Powell would likely trigger a steep sale in the US stock markets, Evercore ISI Vice-President Krishna Guha told CNBC on Monday.
“If you are starting to raise questions about the independence of the federal reserve, you increase the bar for the federal reserve. If you really try to remove the president of the federal reserve, I think you will see a severe reaction on the markets with higher yields, dollars lower and actions that are sold,” said Guha on “Squawk Box”.
“I cannot believe that this is what the administration is trying to achieve,” said Guha.
The stock market, already in shock from increased uncertainty and other concerns from the Trump administration tariff plans, sank further Monday morning. The industrial average of Dow Jones dropped by 750 points, a drop of almost 2%, during the first hour of negotiation, while the NASDAQ dropped by 2.6%.
The US dollar, on the other hand, has slipped to its lowest level since 2022. Unsubscribe on the world markets has sent investors pouring in safety assets such as gold, which reached a record price on Monday, while the yield of the Treasury to 10 years of reference has slipped.
Trump’s latest attacks on Powell followed the Central Bank’s suggestion last week that the president’s trade war will limit growth and could feed inflation.
The prices are “likely to get us more away from our goals … Probably for this year’s balance,” Powell told the Chicago Economic Club.
Powell also ceased to suggest that interest rate reductions were on the horizon.
“For the moment, we are well placed to wait for greater clarity before considering any adjustment to our political position,” he said.
– Alex Harring de CNBC contributed to this report.
Correction: Krishna Guha is vice-president of Evercore ISI. An earlier version has destroyed its title.
